The result of the fall in oil prices has baffled the experts of the IMF, which expected that it will be a stimulus for the global economy because the gain of the importing countries will cover the loss of exporting countries, said in the note Fund, issued on 24 March.
The document notes that since June 2014 oil prices fell by 65%, but in many countries economic growth has slowed. In July 2015, the IMF believed that low prices will lead to increased costs, and will support the acceleration of the global economy.
The world Bank also considered that the fall in oil prices will lead to global GDP growth and lower inflation. Economists of the WB, for example, assumed that the decline of oil prices by 45% would increase the world economy by 0.7-0.8% short-term slowdown in inflation to 1%.
The IMF has noticed that in recent months has significantly increased the correlation between oil and stock market. Experts of the Foundation believe that it happened rather as a result of slowing demand for oil than just from oversupply.
The IMF added that oil made life difficult for Central banks, many of which are not able to lower further interest rates than strengthen expectations of deflation. The Fund warned that in addition to the complication of conditions for the conduct of monetary policy, low oil prices can lead to a series of corporate and sovereign defaults, as well as further complications in the financial markets.
The note says that the possibility of such negative consequences indicates the need to support demand, as well as the implementation of structural and financial reforms in different countries.
“We argue that, paradoxically, the global gain from lower prices, probably, will appear only after some recovery, and after overcoming the developed economies of the current situation with low interest rates,” concludes the IMF.